# Petition for Writ of Certiorari — Service, Hospital, Nursing Home & Public Employees Union, Local 47 v. Commercial Property Services, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_0573%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1985 - **Citation:** 474 U.S. 850 ## Text Office - 85-243 [rere JUN 21 1985 \ IN THE ALEXANDER 1. STEVAS, SUPREME COURT OF THE UNZZED STA PES OCTOBER TERM, 1984 SERVICE, HOSPITAL, NURSING HOME AND PUBLIC EMPLOYEES UNION, LOCAL 47 Petitioner, V+ COMMERCIAL PROPERTY SERVICES, INC., CLEVELAND CLEANING & MAINTENANCE CO., TOTAL SYSTEMS MANAGEMENT, INC., ANTARES, INC. AND FIRST UNION MANAGEMENT, INC. Respondents. On Writ of Certiorari to the United States Court of Appeals for the Sixth Circuit PETITION FOR WRIT OF CERTIORARI GREGORY J. LAVELLE 2201 Superior Avenue, Room 201 Cleveland, Ohio 44114 (216) 621/0995 Counsel for Petitioner QUESTIONS PRESENTED FOR REVIEW Whether related entities which an employer expressly agrees are employers under the Collective Bargaining Agreement should be required to arbitrate a dis- pute falling under that Agreement? TABLE OF CONTENTS Page TABLE OF AUTHORITIES.............0%. (ii) I. QUESTIONS PRESENTED FOR Serres 1 a 5 III. RELEVANT STATUTES.............. g IV. STATEMENT OF THE CASE.......... 11 oe: TEETER TEe 19 a 46 Eg acc tcc c we cenccccn a Part A Judgment and Order of the United States Court of Appeals for the Sixth CarccuLt Memorandum and Order of the United States District Court, Northern District of Ohio, Eastern Division Part B Exhibits "A" - "D" listed TABLE OF AUTHORITIES Page American Bell v. Federation of Telephone Workers 736 F. 2d 879 (3rd Caes SOONE aS kN eas cue ke 17, 31-35 Howard Johnson Co., Inc. v. Detroit Joint Local Execu- tive Board, Hotel & Restaur- ant Employees & Bartenders International Union, AFL-CIO 417 U.S. 249 (1974)........ 28-30, 40 John Wiley and Sons v. Livingston, 376 U.S. 543 a: eS ee ee 27-30 United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564 (1960)... 6, 1 2 United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960). 6, 20 United Steelworkers of America v. Warrior & Gulf Navi- gation Co., 363 U.S. Fe oes | Perret et 6, 18-20 «i he I. QUESTIONS PRESENTED FOR REVIEW Whether related entities which an employer expressly agrees are employers under the Collective Bargaining Agreement should be required to arbitrate a dis- pute falling under that Agreement? Related entities which an employer Collective Bargaining Agreement should be required to arbitrate a dispute falling un- der that Agreement. Petitioner Service, Hospital, Nursing Home and Public Employees Union, Local 47 (hereinafter "Local 47") is a party to a Collective Bargaining Agreement of which Respondent Commercial Property Services, Inc. (hereinafter, "CPS") is a signatory. (Rele- vant portions of that Agreement are attached hereto and marked Exhibit "A".) CPS agreed that parties to the Collec- tive Bargaining Agreement, i.e., the "Employer" be defined as follows: Se (Article XXI, Sus cessors and Assigns Other Empbove r: ~-»-This Agreement hereby covers as an Employer subject to the full terms of this Agreement any indivi- dual proprietors hip, partnership, corporation, firm, or any other entity which is engaged in janitorial work and is in any way a subsidiary or related entity to any Employer covered by this Agreement. speciti- cally and without limitation, this Agreement hereby includes any entity engaged in janitorial work which is operated in whole or in part by any officer, director or any person em- ployed by any Employer covered by this Agreement, and further includes any entity engaged in janitorial work in which any investor in any Employer covered by this Agreement has any interest of any kind... Respondent Cleveland Cleani ng and Maintenance Company (hereinafter, "CCM") fits the contractual detinition of the Employer since it was partially (70%) owned by Patrick J. Cassese (hereinafter, "Cassese") an officer of CPS who owned one hundred percent (100%) of Antares, Inc. (here- inafter, "Antares"), which in turned owned one hundred percent (100%) of CPS. Re- spondent Antares fits the contractual =2- definition of the Employer since it owns CPS. Respondent Total Systems Management, Inc. (hereinafter, "TSM") fits the con- tractual definition of the Employer since it is one hundred percent (100%) owned by CPS. Local 47 sought to have grievances filed under the Collective Bargaining Agreement arbitrated by CPS, CCM, Antares and TSM since they were by definition the Employer under the Collective Bargaining Agreement. The Sixth Circuit Court has held that CCM, Antares and TSM could only be required to arbitrate if the Court finds that there should be a piercing of the corporate veil on an alter ego theory or otherwise at law. Local 47 would have this Court require that the parties arbitrate so long as they fit the contractual definition of the Em- ployer as agreed by the parties. Since the undisputed findings of the District —3- Court establish the oni.2rship and control of CPS, CCM, Antares and TSM, and thus, their status as Employers under the Collective Bargaining Agreement, such entities must be ordered to arbitrate. Ii. WJURISDICTION This matter arose under Section 301 of the Labor-Management Relations Act, 29 U.S.C. §185, as an action to enforce a coliective bargaining agreement. This Petition for Writ of Certiorari requests this Court to review the order of the United States Court of Appeals for. the Sixth Circuit in Case Numbers 83-3761, 83-3762 and 83-3788 decided and filed on February 21, 1984 which vacated the decision of the United States District Court for the Northern District of Ohio, Eastern Division, which has required CCM to arbitrate a grievance with Local 47 and which upheld the decision of the District Court in dismissing Antares and TSM. No motion for reconsideration was filed. An application for an extenstion of time in which to file a Petition for Writ of Certiorari was filed on May 21, 1985 (formally resubmitted on May 31, 1985). -5- ee An order extending time to file a Petition for Writ of Certiorari was granted on June 4, 1985 which extended the time for filing this Petition to June 21, 1985. Jurisdiction of this Court is invoked under Supreme Court Rule 17.1 (c) in that the United States Court of Appeals for the Sixth Circuit had decided an important question of Federal Law which should be settled by this Court, the question of whether related entities which an employer expressly agrees are employers under the Collective Bargaining Agreement should be required to arbitrate a dispute falling under that Agreement. The decision of the Sixth Circuit is in conflict with the decisions in United Steelworkers of America v. American Manu- facturing Co., 363 U.S. 564 (1960), United Steelworkers of American v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960) and United Steelworkers of America v. Enter- a= prise Wheel & Car Corp., 363 U.S. 593 (1960). Iil. RELEVANT STATUTES Section 203 (da) of the National Labor Relations Act, 29 U.S.C. §173 (da): Final adjustment by a method agreed upon by the parties is hereby de- clared to be the desirable method for settlement of grievance dis- putes arising over the application or interpretation of an existing collective bargaining agreement. The Service is directed to make its conciliation and mediation services available in the settle- ment of such grievance disputes only as a last resort and in excep- tional cases. Section 301 of the National Labor Relations Act, 29 U.S.C. §185: (a) Suits for violation of con- tracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this Act, or between any such labor organiza- tions, may be brought in any dis- trict court of the United Siates having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties. (b) Any labor organization which represents employees in an industry affecting commerce as defined in this Act and any employer whose — — activities affect commerce as defined in this Act shall be bound by the acts of its agents. Any labor organization may sue or be sued as an entity and in behalf of the employees whom it represents in the courts of the United States. Any money judgment against a labor organization in a district court of the United States shall be enforceable only against the organization as an entity and against its assets and shall not be enforceable against any individual member or his assets. (c) For the purposes of actions and proceedings by or against labor organizations in the district courts of the United States, dis- trict courts shall be deemed to have jurisdiction of a labor organi- zation (1) in the district in which such organization maintains its principal offices, or (2) in any district in which its duly authorized officers or agents are engaged in representing or acting for employee members. (a) The service of summons, sub- poena, or other legal process of any court of the United States upon an officer or agent of a labor organiza- tion, in his capacity as such, shall constitute service upon the labor organization. (e) For the purposes of this section, in determining whether any person is acting as an "agent" of another person so as to make such other person responsible for his acts, the question of whether the specific acts performed were actually authorized or subsequently ratified shall not be controlling. om 10- IV. STATEMENT OF THE CASE Petitioner Local 47 and CPS were parties to a Collective Bargaining Agree- ment effective May 1, 1981 through April 30, 1984. CPS is a company which provides janitorial (cleaning) services at numerous locations (accounts). CPS and a number of other cleaning contractors execute identicle collective bargaining agreements with Local 47 under which any Employer covered by the Agreement taking over an account previously serviced by another Employer covered by the Agreement is required to retain the previous Em- ployer's employees at the same wages, terms and conditions of employment and hours of work and to recognize the seniority of 1/ those employees—’. (A copy of the rele- MW see Master Agreement, Article XI, Sections 1, 2, 5 and 8.) -ll- vant portions of said Collective Bar- gaining Agreement, hereinafter referred to as the "Master Agreement", is attached hereto and marked Exhibit "A".) CPS was also covered by a Collective Bargaining Agreement (hereinafter referred to as the “Downtown Building Agreement") which contained a Work Preservation clause which states: If an Employer signatory to an agree- ment with the Union takes over the operation of the janitorial and/or maintenance work in a building or buildings covered by this Agreement, the employees performing that work shall be retained in order of their building seniority and in accord with the wages, hours, and other terms and conditions of employment established in this Agreement. The Collective Bargaining Agreement was executed by CPS on behalf of its Successors, assigns and related entities and defined as the Employer covered by the Agreement such related entities. (See Article XXI, Successors and Assigns, Other Employers, Exhibit "A".) -]2- Signatory CPS was owned by Antares which in turn was owned by Cassese, an officer of CPS. Cassese also owned seventy percent (70%) of CCM. During the term of the Collective Bargaining Agreement and prior to Local 47's knowledge of the relationship between CPS and CCM, CCM took over a number of accounts serviced by contractors covered by the Master Agreement; the Lakeland Medical Building, the Young Medical Building, the Shaker Medical Building, Curtis Indus- tries and Diamond Shamrock. In February of 1983, Local 47 became aware of the relationship between CPS and CCM and also became aware that CCM would begin servicing two accounts operated by First Union Management (hereinafter, "First Union"), the Illuminating Building and the Rockwell Building. These accounts had been serviced by National Cleaning, a Signatory to the Master Agreement. «} Be Local 47 thereupon filed a grievance in the form of a letter (attached hereto and marked Exhibit "B") alleging a viola- tion of Articles XI and XXI of the Master Agreement and/or the Work Preservation article of the Downtown Building Agreement. The letter informed the Employer that unless it agreed to restore the former employees to employment and otherwise honor its Collective Bargaining Agreement, Local 47 would seek injunctive relief and would week arbitration of the dispute. 2/ When CCM failed to comply wi-.h the directions in the grievance letter, Local 47 filed suit against CPS, CCM, Antares, TSM and First Union=* in the United States District Court for the Northern District 2! see Article XXVIII of the Master Agreement, Remedies. — 2 3 First Union was joined for injunctive purposes and under a cause of action for malicious interference with con- tract. (See Plaintiff's Second Cause of Action. ) -l]14- of Ohio, Eastern Division pursuant to Section 301 of the Labor-Management Relations Act, 29 U.S.C. §185. (A copy of Local 47's Complaint as amended is attached hereto and marked Exhibit "C".) Local 47 moved for Summary Judgment on its Complaint; CCM moved for Partial Summary Judgment; Antares and TSM filed Motions to Dismiss. Local 47's Motion for Summary Judg- ment was granted to the extent that CPS and CCM were ordered to arbitrate but granted Antares and TSM's Motion to Dismiss. (See Memorandum and Order of the District Court included in the Appendix hereof.) CPS and CCM appealed the decision of the District Court in ordering CCM to arbitrate. Local 47 cross-appealed from the decision of the District Court -15- to dismiss Antares and TSM. The United States Court of Appeals for the Sixth Circuit vacated the de- cision of the District Court which ordered CCM to arbitrate saying, "We hold that a district court may not order a non-Signatory to arbitrate a labor dispute absent a specific finding that the relationship between it and the party bound to the agreement is such that 1t too is bound... We, therefore, vacate the order of the district court and remand the case to it for a determina- tion of whether the facts warrant a finding that CCM and CPS are alter egos Or constitute a single Employer or whether the corporate veil should otherwise be pierced". The Sixth Circuit Court further ak Pana upheld the District Court's dismissal of Antares and rsm.2/ The Sixth Circuit thus held that there must be a finding of alter ego or single-employer status generally at law to bind a non-signatory employer to arbitrate even where the Collective Bar- gaining Agreement defines that related entity as the Employer .=/ Petitioner believes that where an 4/ — The Sixth Circuit Court also upheld the District Court's denial of CCM's Motion for Partial Summary Judgment indicating that Local 47, since dis- covery had not been completed, had not had the opportunity to present evidentiary support for its alter ego single-employer theory. 5/ —It is interesting to note that the case cited in support of the Sixth Circuit Court's decision, American Bell v. Federation Telephone Workers, 736 F. 2d 879 (3rd Cir. 1984) was a split decision of the Court. The dissent would have required arbitra- tion and the majority remanded noting that the contract definition was unclear. a 3 Fa employer signatory to a Collective Bar- gaining Agreement agrees that certain related entities are also bound by the Collective Bargaining Agreement, such related entities should be required to arbitrate a dispute under the Collective Bargaining Agreement, "unless it can be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute", United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960). -|18- V. ARGUMENT There is nothing more important to Federal labor policy than the existence Of a functioning labor arbitration System. It 1S so important that Congress has seen fit to express the National policy favoring arbitration as a matter of law in Section 203 (d) of the National Labor Relations Act, 29 U.S.c. §173 (d): Final adjustment by a method agreed upon by the parties is hereby declared to be the desirable method for settle- ment of grievance disputes arising over the application or interpretation of an existing collective bargaining agree- ment. The Service is di rected to make its conciliation and mediation servi, es available in the settlement of such grievance disputes only as a last re- sort and in exceptional cases. This Court likewise has expressed its Policy toward favoring arbitration in the Steelworkers Trilogy; United Steel- workers of America V- American Manu- facturing Co., 363 U.S. 564 (1960), United Steelworkers of America V. Warrior & Gulf ee -~]9- Navigation Co., 363 U.S. 574 (1960) and United Steelworkers of America v. Enter- prise Wheel & Car Corp., 363 U.S. 593 (1960). This Court expressly stated in Warrior & Gulf, supra, "The grievance machinery is at the very heart of the system of industrial self-government" (363 U.S. 574 at 581). The message of the Steel- workers' cases is clear; arbitration is a system of industrial self government under which parties bargain for a decision by an arbitrator based on the terms of their agreement, not on some body of law external to that document. The Sixth Circuit Court would have the external body of law, the doctrine of successor- ship, alter ego and piercing of the corpor- ate veil prevail over the Collective Bar- gaining Agreement requiring a finding at law on these issues before arbitrating a dispute falling within the Collective Bargaining Agreement. This holding flies -20- in the face of the Steelworkers' cases. Under the Steelworkers' cases, if a party claimed that there was a violation of a collective bargaining agreement, an arbitrable issue was created. [In American Manufacturing, supra, the test was stated clearly and unequivocably. "The Union claimed in this case that the Company had violated a specific pro- vision of the contract. The Company took the position that it had not violated that clause. There was, therefore, a dispute as to 'the meaning, interpretation and application’ of the Collective Bar- gaining Agreement. Arbitration should have been ordered". (363 U.S. 564 at 569) The effect of the decisions in the Steelworkers’ cases was dramatic. This Court did not just decide three cases; it changed in one bold swoop the entire system of handling grievances across the nation. -2?\i- Where a party could, with impunity, resist arbitration through obstinance or protracted appeal, that avenue was no longer generally available. Before the Steelworkers' cases, a party demanding arbitration from an unwill- ing party could expect to fact a full adjudi- catory hearing in the Federal Courts and an appeal from that determination. The rezcisting party could create an issue requiring a full hearing in the Court by simply stating, "The meaning of the language of the Collective Bargaining Agreement is beyond dispute". The Steel- workers' cases put an end to that ploy by taking the question of the merits of the controversy out of the hands of the Courts recognizing that allowing the Courts to determine the merits of an arbitration “could only have a crippling effect on grievance arbitration", American Manu- facturing, 363 U.S. 564 at 567. -22- Allowing the Courts to hear the merits of arbitration had, in fact, crippled grievance arbitration. The projected cost of a procedure where the courts would be able to hear the merits of any arbitration would easily dissuade or destroy the party seeking to vindicate its rights. Cost alone was not the only problem. The delay occasioned by such a procedure could destroy the entire collective bar- gaining process as decisions would be rendered long after the collective bar- gaining agreements under which they arose expired. (The case, the subject of this Petition for example, relates to decisions of the District Court on Motions for Summary Judgment concerning a grievance filed in 1983.) Further, prior to the Steelworkers‘ cases, during the interim between the filing of the grievance and final adjudication in the Courts, a lack -—-23- of confidence or disenchantment with the arbitration process could develop and could lead to the result Congress most wanted to avoid; labor strife. This Court is quite aware that "arbitration is the substitute for labor strife", Warrior & Gulf, 363 U.S. 574 at 378. After the Steelworkers' cases, the burdens of money and time were all bvt eliminated. A party seeking arbitration could expect the prompt granting of a Motion for Summary Judgment based on nothing more than a short memorandum and an affidavit, a relatively inexpensive proposition. The result in such cases would be pre-ordained in light of this Court's admonishment that "an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation —-24- that covers the asserted dispute. Doubts should be resolved in favor of coverage". Warrior & Gulf, supra, at 583. Parties resisting arbitration were foreclosed from protracting litigation by arguing the merits of the grievance and were severely burdened in prevailing on the remaining issue of procedure arbi- trability. In most cases, parties ceased to resist arbitration. Where parties did resist to the point of facing suit, a result was obtained at a bearable expense, in a reasonable time in such a manner to vindicate the arbitral process. Where parties resisted beyond the Summary Judg- ment stage, they ran the ri. of facing sanctions under Rule 11 of the Federal Rules of Civil Procedure. The beauty of the Steelworkers' cases was the fact that they were nearly a Bion self policing. This Court gave direction in an important federal area, closing a door to those who could resist arbitra- tion. With the door closed once and for all, parties to collective bargaining agreements were channelled into arbitra- tion, the method Congress favored for dispute resolution. The case presented for review today asks this Court to give the same type of direction to the parties to collective bargaining agreements across the nation, at the same time to vindicate its decision in the Steelworkers' cases and to re- enforce the Congressional policy in favor of arbitration. Here, CPS cannot legitimately claim that CCM, Antares and TSM are not covered by the express language of the Collective Bargaining Agreement. CPS essentially claims that those entities which it agreed were bound as employers to the Collective —-26- Bargaining Agreement need not arbitrate the grievance because they are not sSigna- tories to the Agreement. The fact of an Employer being or not being a Signatory to a collective bargaining agreement has never been the determining factor. The question is whether the successor undertook the obli- gations of the contract. See John Wiley co and Sons v. Livingston, 376 U.S. 543 1964, 2/ Wiley stands for the proposition that once an entity undertakes the obliga- tions of a collective bargaining agreement, it becomes bound to the arbitration clause. It is clear here that the related entities of CPS undertook the obligations of the Collective Bargaining Agreement expressly by negotiation and under Wiley should be bound to arbitrate. Note, there was no successorship clause in the collective bargaining agreement in Wiley. -2?7- Obviously, the Respondent will cite Howard Johnson Co., Inc. v. Detroit Joint Local Executive Board, Hotel & Restaurant rry mployees & Bartenders International Union, —————E————EE AFL-CIO, 417 U.S. 249 (1974) for the propo- sition that CCM, Antares and TSM should } »9t be bound claiming that there was "no substantial continuity of identity in the business enterprise" between CPS and its three related companies. If one looks closer, however, at the decision in Wiley and Howard Johnson's, One can see that the two decisions are completely consistent in saying that the duty to arbitrate arises from the existence of either of two factors; the "substantial continuity of identity in the business enterprise" or the Collective Bargaining Agreement itself. Wiley states‘ at page 551: —-?8- "There may be cases in which the lack of any substantial continuity of identity in the business enterprise %efore and after a change would mak* tse duty to arbitrate something imposed irom without, not reasonably, to be found in the particular bargaining agreement and the acts of the parties involved." (Emphasis supp lied) (376 U.S. 543 at 551) In other words, under Wiley, if the Collective Bargaining Agreement itself is not expressly a source of the duty to arbitrate, that duty might be found to exist by implication due to a “substantial continuity of identity". Howard Johnson's again stressed as in Wiley that a lack of substantial continuity of identity and an absence of an agreement to arbi- trate relieved the entity from the duty tc arbitrate: Since there was plainly no substantial continuity of identity in the work force hired by Howard Johnson's with that of Grissom's and no express or implied assumption of the agreement to arbi- trate, the courts below erred in con- pelling the company to arbitrate... 417 U.S. 249 at 264 (Emphasis supplied) -—-29- . 3 Ww DIA La 4 [a » } Be } - TJ 7 il ¥ ; yay iw f tr} Wil Both the District Court and the th Circuit Ccurt have overlooked the t that there are two separate grounds holding a non-Signatory liable t itrate a dispute under a collective gaining agreement in Wiley and fT f ird J hn son's; Ll) the a spect > OF ilter n ubstantial continuity « bus] 3S rprise which aris iS a matter of , and 2) the assumption of the duties the Collective Bargaining Agreement ch arises as a matter of contract. Local 47's suit to compel arbitra- n seeks to compei CCM, Antares and law rather i TSM to arbitrate on both theories; that CI contract by agreement of the parties . binds them, and that as alter egos they 3 are bound as a matter of law. 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The fact that the argument of Local 47 relating to the rights under the contract was missed by the Sixth Circuit Court is found in that Court's reliance on American Bell, Inc. v. Federa- tion of Telephone Workers of Pennsylvania, 736 F. 2d 879 (3rd Cir. 1984). The Sixth Circuit cited American Bell, supra, for the proposition that the Federal Court must make a determina- tion of whether an entity is bound to a collective bargaining agreement as a matter of law before arbitration will be compelled. The Sixth Circuit takes it that the de- termination must be made on the basis of a sham corporation or alter ego theory. While the Sixth Circuit notes that the Seventh Circuit remanded the case to the District Court in American Bell, it does not go on to determine why the case was remanded. -—3]- Looking carefully at American Bell, we find that the reason the case was re- manded was that the Circuit Court could not determine that the lower court had found that the company was a party by definition of the Collective Bargaining Agreement. The Collective Bargaining Agreement in American Bell required the employer to-secure the assent of any “successor organization" that the Collective Bar- gaining Agreement between the Employer and the Union would continue in effect and bind that successor organization. The company in American Bell had argued in the lower court that "successor organization" meant a "Successor" as de- fined at law. The Union, however, argued that the definition of successor organiza- - tion included all related transferees.— 7 Tyote again that we do not have any definitional problem or argument i BD | | ———_ a The Court of Appeals in American Bell was concerned with the contract definition of successor organization but could not determine the lower court's Oe ea Fe interpretation: The resolution of the dispute about the interpretation of successor organization in the present case de- pends on the intent of the parties, a question of fact. We may infer from the district court's ruling that it concluded ABI was a successor organization. Without an adequate record and articulation of factual findings, however, we cannot review that conclusion 736 F. 2d 879 at 885 The Seventh Circuit later in its opinion discarded completely the theory of binding American Bell on the issue of successorship at law but again rein- forced its direction to consider the Collective Bargaining Agreement, itself, | as a source of a duty to bind the related entity: in this case since "related entities" is exhaustively defined in the Collective Bargaining Agreement. -33- We simply hold that the Union may not use the successor doctrine to bind ABI to the bargaining agreement with regard to the transferred assets. We do not hold that ABI is not a "successor" within the meaning of federal labor law. Although normally the question of ABI's status as a successor would not be relevant once the doctrine itself had been found to be inapplicable, in the present case ABI's status as a successor may also be relevant to a determination of ABI's obligations on the basis of paragraph 12 of the Memorandum of Agreement. See supra at p. 885. The district court will be free on remand to consider this issue. (Emphasis supplied) 736 F. 2d 879 at 888 The Third Circuit Court finally dis- carded the single enterprise and alter ego theories completely as a reason to bind the related entity leaving the con- tract theory the only issue on remand: We therefore conclude that ABI is not obligated to arbitrate its grievances with the Union under the collective bar- gaining agreement on the basis of some extra-contractual theory of federal law. If arbitration is required, it must be because such an obligation has been im- puted to ABI on the basis of the Memo- randum of Agreement. The order of the District Court will be reviewed and this action will be remanded for further proceedings consistent with this opinion. [id at 889] -34- What the Sixth Circuit Court seems to have missed in reading American Bell is that if a non-signatory related entity cannot be bound by the contract, then there would have been nothing left to consider on remand in American Bell. If the contract theory could not apply, American Bell would have been reversed and remanded with directions to dismiss the’ action. Instead, the Third Circuit gave the District Court express directions to consider the Collective Bargaining Agreement and make its findings clear. The remand, as in the case at hand, would not have happened in the Third Cir- cuit since there is no question as to the meaning of the term "related entity" aS it applies to CCM, Antares and TSM. The Sixth Circuit has ordered a re- mand where none was necessary and remanded the case without even mentioning the -35- oe, ian meaning of the Collective Bargaining Agreement ; the agreement of the Parties, Unfortunately, the Sixth Circuit has Strayed from the teachings Of the Stee]l- workers' cases that arbitration is a System of industria] self government. It has ignored the fac t that arbitration is the Substitute for labor Strife and that, therefore, judgments and final Settlements must come quickly in a manner Only arbitration Can provide. Today, more than ever, it is necessary that direction be given by this Cour = that when a Party to a Collective bargaining agreement Specifically “grees that its related Entities are bound to the Collec- tive Bargaining Agreement, an arbitration Of a dispute With the related entity wil] be ordered to arbitration. The reasons for such direction are ©xXactly those which existed Prior to the —- 36- Steelworkers' cases. The remedies at law are inadequate to avoid inequity and in- dustrial strife. Just as in the Steel- workers' cases, the costs to obtain judg- ments are too great in most cases and the delays are such as to render even victories hollow. Since the Steelworkers' cases of twenty-five years ago, the nature of collective bargaining agreements and the “nature of the work force make direction of this Court even more vital. Today, collective bargaining agree- ments often contain jointly trusteed health & weifare and pension plans, like those in the Collective Bargaining Agree- ment between Local 47 and CPS. (See Articles IX and XII of the Master Agree- ment, Exhibit "A".) These funds have a definite interest in maintaining their actuarial base. As -37- tainly aware of the potentiai problems involved with labor strife. The National Labor Relations Act obviously did not come about as a result of smooth sailing in the relationship between labor and management through the 1930's. Congress created the National Labor Relations Act in 1934 to establish the Federal Policy of peacefully resolving labor disputes. Twenty-Six years later, this Court found it necessary, in the Steelworkers' cases, to make sure that the machinery of re- solving labor disputes could function in the industrial setting. Another twenty- Six years has almost passed, and now we believe it necessary that this Court again give direction so that the arbitration system can function effectively in today's service related economy. -45- IV. COWCLUSION For the above reasons, this Court should grant the Petition for Certiorari to hear Petitioner's claim that related entities which an Employer expressly agrees are employers under the Collective Bar- gaining Agreement should be required to arbitrate a dispute Agreement. falling under that Respectfully submitted, /) | / ) hf LD || food Gregory J. Wavelle 2201 Superigr Avenue Room 201 Cleveland, Ohio 44114 (216) 621/0995 Counsel for Petitioner 46- Af te + ee a! 4" 4A ste CERTIFICATE OF SERVICE Copies of the within Petition for Writ of Certiorari were served upon Respondents Commercial Property Services, Inc., Antares, Inc. and Total Systems Maragement, Inc. c/o Robert T. Rosenfeld, Esquire, Walter, Haverfield, Buescher & Chockley, 1215 Terminal Tower, Cleveland, Ohio 44113; Respondent Cleveland Cleaning and*Maintenance Company c/o Gregory P. Szuter, Esquire, Schwartz, Einhart & Simerka, 800 National City Bank Building, Cleveland, Ohio 44114; and Respondent First Union Management, Inc. c/o Keith Ashmus, Esquire, Thompson, Hine and Flory, 1100 National City Bank Building, Cleveland, Ohio 44114 and c/o Daniel K. Wright, II, Esquire, 55 Public Square, Suite 1900, Cleveland, Ohio 44113 on this 22nd day of July, 1985 by depositing same in the United States -A7- Regular Mail, First Class, Postage Pre-paid. is iy Gregory J./ Lavelle Attorney for |/Petitioner \ -48- VII. APPENDIX Part A JUDGMENT AND ORDER of the United States Court of Appeals for the Sixth Circuit, Case Nos. 83-3761, 83-3762 and 83-3788 MEMORANDUM AND ORDER of the United States District Court, Northern District of Ohio, Eastern Division, Case No. C83-588 Part B Exhibit "A" - Relevant portions of Master Agreement pp. A-1l to A-17 Exhibit "B" - Local 47's Grievance (in letter form) pp. B-l to B-3 Exhibit "C" - Local 47's Complaint as amended pp. C-l to C-2l Exhibit "D" - Page 61 of the transcript of proceedings before Judge Bell in the United States District Court for the Northern District of Ohio, Eastern Division, found at page 618 of the Joint Appendix before the Sixth Circuit Court pp. D-1 to D-2 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT NOS. 83-3761 83-3762 83-3788 SERVICE, HOSPITAL, NURSING HOME AND PUBLIC EMPLOYEES UNION, LOCAL NO. 47, affiliated with the SERVICE EMPLOYEES INTERNATIONAL UNION, AFL-CIO, CLC Plaintiff-Appellee, Cross Appellant, Vv. COMMERCIAL PROPERTY SERVICES, INC., and CLEVELAND CLEANING & MAINTENANCE COMPANY, Defendants-Appellants, Cross Appellees, and TOTAL SYSTEMS MANAGEMENT, INC,, ANTARES, INC., and FIRST UNION MANAGEMENT, INC. Defendants, Cross Appellees. ENGEL and WELLFORD, Circuit Judges; and ROSENN, Senior Circuit Judge. JUDGMENT ON APPEAL from the United States Dis- trict Court for the Northern District of Ohio. THIS CAUSE came on to be heard on the record from the said District Court and was argued by counsel. ON CONSIDERATION WHEREOF, It is now here ordered and adjudged by this court that the judgment of the said District Court in this case be and the same is hereby affirmed in s BEST AVAILABLE COPY ————————eeaaaeaeEeEeyQGVQVEuECNV070XQuVQuV50QQQQQrereEYEe ™ part and the case is remanded for further proceedings not inconsistent with this opinion. It is further ordered that in case 83-3761, each party is to costs in this appeal. It that in case 83-3762, the cover from Appellants the as itemized below. It is that in case 83-3788, the bear its own is further ordered Appellees re- costs on appeal further ordered Cross Appellees recover from Cross Appellant the costs on appeal, as itemized below. Execution there- for shall issue out of said District Court, if necessary. A TRUE COPY Attest: By Deputy Clerk ENTERED BY ORDER OF THE COURT John P. Hehman, Clerk /s/ John P. Hehman Nos. 83-3761 83-3762 83-3788 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT SERVICE, HOSPITAL, NURSING HOME : AND PUBLIC EMPLOYEES UNION, LOCAL NO. 47, AFFILIATED WITH THE SERVICE EMPLOYEES INTER- NATIONAL UION [sic], AFL-CIO, CLC,: Plaintiffs-Appellees, Cross-Appellants, WR ON Cora eStats lS”. ANTARES, INC.; TOTAL SYSTEMS MANAGEMENT INC.; FIRST UNION MANAGEMENT, INC., Defendants-Appellees. COMMERCIAL PROPERTY SERVICES, INC... EY AL., Defendants, : CLEVELAND CLEANING & MAINTENANCE : COMPANY, Defendant-Appellant, Cross-Appellees. : Upon consideration of the motions of the parties to the appeal and cross-appeals herein to enlarge the oral argument time by an additional fifteen rr tes, IT IS ORDERED that tne motions be, and they hereby are granted. ENTERED BY ORDER OF THE COURT John P. Hehman, Clerk /s/ John P. Hehman Sa &es--”™”””&©«»©3=273=723=73;7S;7S;CS;CT;CS CT OSté‘(=‘: RECOMMENDED FOR FULL TEXT PUBLICATION See, Sixth Circuit Rule 24 Nos. 83-3761, 83-3762, 83-3788 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT SERVICE, HOSPITAL, NURSING HOME AND PUBLIC EMPLOYEES UNION, LOCAL NO. 47, AFFILIATED WITH THE SER- VICE EMPLOYEES INTER- NATIONAL UNION, AFL-CIO, CIC, Plaintiff-Appellee, Cross-Appellant, ) ) ) ) ) ) ) ) ) ) Vv. ) ON APPEAL from ) the United States COMMERCIAL PROPERTY SER- ) District Court VICES, INC., AND CLEVE- ) for the Northern LAND CLEANING & MAINTEN- ) District of Ohio, ANCE COMPANY, ) Eastern Division. Defendants-Appellants,) ) ) ) ) ) ) ) ) ) ) Cross-—Appellees, and TOTAL SYSTEMS MANAGEMENT, INC., ANTARES, INC., AND FIRST UNION MANAGEMENT, INC., Defendants, Cross-Appellees. Decided and Filed February 21, 1985 4 Local No. 47 v. Commercial Property Nos. 83-3761, etc. Before: ENGAL and WELLFORD, Circuit Judges; and ROSENN, Senior Circuit Judge.° ROSENN, Senior Circuit Judge. The novel and underlying issue raised in these pro- ceedings is whether a non-signatory to a collective bargaining agreement who does not stand in a successor relationship to a Signatory to the agreement or to its work force can be bound by the grievance and arbitration provisions of that contract. In a suit brought by Service, Hospital, Nursing Home and Public Employees Union, Local No. 47, affiliated with the Service Employees Inter- national Union, AFL-CIO, (Local 47 or Union), under section 301 of the Labor Management Relations Act, 29 U.S.C. §185 (1982), Local 47 alleged that the defendant, Commercial Property Services (CPS) through its alter ego, Cleveland Cleaning and Maintenance Co. (CCM) breached a collective bargaining agreement with Local 47. The complaint alleged that the employer violated the collective bargaining agreement by hiring non-union employees to work at several Cleveland buildings, operated by First Union Management Co. (First Union). The district court granted Local 47's motion for summary judgment and ordered CPS and CCM to arbitrate. The court denied Local 47's request for injunctive relief and dismissed First Union and two companies related to CPS. We affirm in part and reverse in part. °Honorable Max Rosenn, Senior United States Circuit Judge for the United States Court of Appeals for the Third Circuit, Sitting by designation. es Local 47 has been a party to a series of collective bargaining agreements with the defendant, Commercial Property Services, Inc., covering the employees engaged in the Cleve- land area in janitorial and custodial work since the founding of the company in 1974. The most recent of these agreements, effective May 1, 1981, to April 30, 1984, contains three provisions that are pertinent to this proceeding. Article XI is a job security provision and requires a signatory employer who takes over an account previously serviced by another signatory employer to retain the prior employer's employees at the same wages, terms, and hours of work.1 Article XXI de- fines in broad terms the scope of the agreement. It provides, in part, that the contract covers as an employer subject to its full terms, tthe relevant provisions of Article XI state: * JOB PROTECTION Section 1. When an Employer takes over an account at which employees represented by the Union were previously employed, re- gardless of who was the Employer, the Employer shall not reduce the rate of pay, the other terms of compensation, or the number of employees and their hours of work...without the express written consent of the Union, unless one of the exceptions set forth in Section 2 of this Article may be applied. Section 8. If an Employer takes over an account with which Local 47 has an Agreement other than this Agreement, the Employer will sign an Assumption Agreement prior to taking over the job. All conditions such as rates of pay, hours of work, seniority, vacations, holi- days,...shall continue as they previously existed. any...corporation, firm, or any other entity which is engaged in janitorial work and is in any way a subsidiary or related entity to any Employer covered by this Agreement. Specifi- cally and without limitation, this Agreement hereby includes any entity engaged in janitorial work which is operated in whole or in part by any officer, director or any person em- ployed by any Employer covered by this Agreement, and further includes any entity engaged in janitorial work in which any investor in any Employer covered by this Agreement has any in- terest of any kind. Finally, Article XIX requires the parties to settle any differences “as to the meaning of or application of provisions of this agreement" in a four-step process terminating in final and binding arbitration. Local 47 also had a three-year contract with National Cleaning Contractors (National), executed in November, 1982. Local 47 members employed by National cleaned and maintained two downtown Cleveland office buildings (the Rockwell properties and the Illuminating Building), which were operated by First Union Management, Inc. First Union entered into subcontracts with independent companies for janitorial and custodial services. When the cleaning contract between National and First Union expired in 1982, First Union solicited bids from other cleaning companies. National and CPS, signatories to a master ayreement with Local 47, both submitted bids which were rejected, and First Union ulti- mately awarded the contract to CCM, a non- union firm. National thereupon laid off the Local 47 members whom it previously had employed to clean the First Union buildings. CCM took over the janitorial and custodial services in both buildings in February 1983 with its own non-union employees. In February 1983, Local 47 discovered that there was a close relationship be- tween CCM and CPS. This discovery drew forth the remainder of the corporate cast in these proceedings. The principal actors are CPS and CCM, and playing a major role because of his relationship with each of them is Patrick Cassese. He and twelve other investors formed CPS, and Ohio corpora- tion, in 1974 and Cassese operated the company and owned 49% of its shares. In 1978, CPS created a wholly-owned subsidiary, Total Systems Management, Inc. (TSM) to act as a consulting firm for small tenant buildings. TSM subcontracted all services to other companies, including both CPS and CCM, employed no one subject to Local 47's jurisdiction, and ceased business in 1982. In November 1982, Cassese formed Antares, Inc., a Pennsylvania corporation, for the express purpose of purchasing the shares of the other twelve investors in CPS. The district court found that Cassese owned all of the capital stock of Antares which in turn owned 100% of CPS. Jack Cornachio, a nephew of Cassese, acquired the CCM business in 1976. Because of financial difficulties, Cornachio en- tered into an agreement in October 1982 with Cassese to sell him 70% of the shares but with an arrangement to retain 50% control. Cornachio continued as president and in con- trol of CCM operations. Cassese's personal attorney, Robert Rosenfeld, served as one of CCM's two directors and as its secretary- treasurer. In fact, Cassese personally represented CCM in its successful negotia- tions with First Union, after CPS's bid had been rejected. With the foregoing information in its possession, Local 47 launched its attack on CPS and CCM. First, it sent a letter to Cassese as president of CPS alleging that CPS violated the work preservation clause of the collective bargaining agree- ment with Local 47 by replacing Local 47 members with non-union employees at the two First Union buildings and at five other buildings, Lakeland Medical, Young Medical, Shaker Medical, Curtis Industries, and Diamond Shamrock. The letter informed CPS that unless it agreed to restore the former employees, Local 47 would seek injunctive relief to compel arbitration. When CCM refused to retain the former National employees pending arbitration, Local 47 filed suit against CPS, CCM, First Union, Antares, and Total Systems Manage- ment (TSM)2 Local 47 also filed a motion a at the same time, Local 47 filed an un- fair labor practice charge with the National Labor Relations Board (NLRB) against CPS, CCM, and First Union. CPS responded by filing a petition for unit classification with the NLRB by which it sought to define the number of its employees subject to the terms of the master agreement. Local 47 also filed unfair labor p»actice charges with the Board charging CPS with interfering with its employees" bar- gaining rights and with assaulting its pickets at the Rockwell building. for a temporary restraining order and First Union moved to dismiss. After a hearing on Local 47's motion, the court granted First Union's motion and denied Local 47's. Local 47 then moved for summary judgment. CCM moved for partial summary judgment and Antares and TSM filed motions to dismiss. In September 1983, the court granted Local 47's motion for summary judgment, ordering CCM and CPS to arbitrate with Local 47 the questions of whether CCM was bound by the terms of the CPS-Local 47 agreement and whether the agreement had been breached. The court dismissed Antares and TSM from the lawsuit and denied CCM's motion for partial summary judgment. CCM and CPS appealed from the rulings granting Local 47's motion for summary judgment, and CCM appeals from the denial of its motion for partial summary judgment. Local 47 cross-appeals from the dismissal of First Union, TSM, and Antares and from the denial of injunctive relief. oo CPS and CCM argue that the court erred in granting Local 47's motion for summary judg- ment and ordering them to arbitrate. They contend that before ordering arbitration, the court should have determined whether CCM was bound by the terms of the Local 47- CPS collective bargaining agreement. In Howard Johnson Co. v. Detroit Local Joint Executive Board, 417 U.S. 249 (1974), the Supreme Court addressed a question with respect to a contract which purported to bind the successors and assigns of the em- ployer. In that case, the former employer, the Grissoms, Signed collective bargaining agreements which contained arbitration clauses and provided that the contract would be binding upon the employer's "successors, assigns, purchasers, lessees, or trans- ferees". Howard Johnson, 417 U.S. at 251. The Grissoms sold their business to Howard Johnson, with an agreement expressly providing that Howard Johnson with certain exceptions would not assume the Grissoms' obligations, “including those under a labor agreement covering employees at two establish- ments". Howard Johnson then terminated the Grissom employees and hired its own employees, few of whom previously had worked for the Grissoms. The Grissoms admitted that the collective bargaining agreement required that they as Signatories arbitrate. Howard Johnson, howcver, refused to do so. The Supreme Court held that Howard Johnson could not be bound to the collective bargaining acreement between the Grissoms and the Union, absent a judicial determination of substantial con- tinuity or identity of the work force or assumption of the agreement to arbitrate by Howard Johnson. The mere existence of the successor- ship clauses in the bargaining agree- ments between the unions and the Grissoms, however, cannot bind Howard Johnson either to the sub- stantive terms of the agreements or to the arbitration clauses thereof, absent the continuity required by Wiley, when it is perfectly clear the Company refused to assume any obligations under the agreements. ied. #6 258, nad. The Court distinguished its previous de- cision in John Wiley and Sons v. Livingston, 376 U.S. 543 (1964), in which a successor corporation was ordered to arbitrate pur- Suant to a collective bargaining agreement signed by its predecessor, with whom it had merged. The Court noted that the successor was properly ordered to arbitrate in Wiley where the predecessor employer entity had "completely disappeared" as the result of a merger. Unless the union were afforded some remedy against the successor, it would have no means of en- forcing those obligations voluntarily under- taken by the merged corporation which were intended to survive a change in ownership. Howard Johnson, 417 U.S. at 257. The hiring in Wiley by the surviving corporation of all of the employees of the predecessor corporation also weighed heavily in the Howard Johnson decision. The grievance which the union sought to compel Wiley to arbi- trate were the claims of Wiley's own employees. In Howard Johnson, by contract, the union sought arbitration on behalf of the former Grissom employees who were not hired by Howard Johnson. Id. at 258-260. What Local 47 seeks to do here is very Similar to what the union sought in Howard Johnson, and the result must be the same. In this case, the signatory employer, CPS, continues as a viable entity with which the Union may bargain and arbitrate.3 Therefore, >the district court found that approximately 2000 people are now engaged in janitorial and security guard work for CPS in Cleveland and Columbus, and in various cities in Pennsylvania, Colorado, and Texas. Service, Hospital, Nursing Home and Public Employees Union, Local No. 4/7 v. Commercial Property Services, Inc.,No. C83-588 (N.D. Ohio Feb. 25, 1983) (order denying motion for temporary restraining order and dismissing First Union). if CCM is not ordered to arbitrate, the Union is not left without a remedy. Furthermore, the employees Local 47 seeks to protect are not and were not CCM's em- ployees, but rather National employees. National laid them off when First Union awarded the contract to CCM. In this case, as in Howard Johnson, there is no continu- ity or identity of CCM's work force with National's work force. Therefore, the court may not order CCM to arbitrate, ab- sent a finding that CCM and CPS are alter egos, or that the two constitute a single employer, or without otherwise determining that the situation is appropriate for piercing the corporate veil. See American Bell, Inc. v. Federation of Telephone Workers, 736 F. 2d 879, 886-889 (3rd Cir. 1984) .4 The leading Sixth Circuit case in this area is not to the contrary. In Local 6, Bricklayers International Union v. Boyd G. Heminger, Inc., 483 F. 2d 129 (6th Cir. 1973), three unions charged that Yeminger violated the union security and arpitration clauses of their collective bargaining agreement by hiring non-union employees through its “sham" corporation, Frank Fulton, Inc. The district court refused to refer the matter to arbitration because "the evidence and testimony indicate[d] a lack of sufficient common factors to illustrate a Single employer or alter ego theory". 1c. Qt &3i. ‘whe Howard Johnson court emphasized that "this is not a case where the successor corpora- tion is the ‘alter ego' of the predecessor..." 417 0.8. at 259, 2.35. The unions sought a remand with regard to Heminger only. This court reversed, holding that "[I]n signing these arbitra- tion agreements the parties agreed to 'sub- mit all grievances to arbitration, not merely those a court may deem to be meritorious'". Id. at 131, quoting United Steelworkers v. American Manu- facturing, Inc., 363 U.S. 564, 567 (1960). The court therefore ordered Heminger to arbitrate the dispute according to the arbitration agreement which it hac signed; it held Heminger to its promise to arbi- trate grievances. The court, however, did not order Fulton, the non-signatory sub- cidiary, to arbitrate the dispute. Consistent with Heminger, the district court in the case at bar did not err in ordering CPS to arbitrate, for CPS, like Heminger, wasS a Signatory to the collective bargaining agreement, CPS must keep its promise to the Union to arbitrate grievances under the contract. However, we hold that a district icourt may not order a non- Signatory to arbitrate a labor dispute, absent a specific finding that the relation- ship between it and the party bound to the agreement is such that it too is bound to arbitrate. See also General Drivers, Local Union No. 89 v. Public Service Co. of Indiana, 705 F. 2d 238, 241 (7th Cir. 1983). We therefore vacate the order of the district court and remand the case to it for a determination of whether the facts warrant a finding that CCM and CPS are alter egos, or constitute a single employer or whether the corporate veil should otherwise be pierced. See American Bell, 736 F. 2d at 886-89.> cps and CCM also contend that they may not be compelled to arbitrate without a determina- tion by the National Labor Relations Board of the appropriate bargaining unit. The threshold question of whether CCM is bound by the CPS- Loci l 47 collective bargaining agreement does not require the determination of an appropriate bargaining unit. The matter would only warrant a submission to the Board if the district court found that CCM was bound by the collective bargaining agreement had been breached. Counsel for CPS has brought to our attention the recent decision of this court in Aquabrom, Division of Great Lakes Chemical Corp. v. NLRB, 746 F. 2d 335 (6th Cir. 1984). That case, however, arose in a different procedural context from the case at bar, and is there- fore distinguishable. Aquabrom involved a Board order upholding a representation election and ordering Drug Research, Inc. its successors and assigns to bargain with the union. Aquabrom refused to do so on the grounds that it was not a successor to Drug Research, and the Board sued for contempt. This court held that, in that context, it was up to the Board, rather than the Special Master appointed by the district court, to determine whether Aquabrom would be bound by the Board's order. Aquabrom involved the question of whether a successor would be held liable for the unfair labor practices of its predecessor, and the concerns for procedural safeguards and deferral to agency expertise were more pressing than in the essentially contractual dispute at bar. Iil. In the prayer of their amended complaint, Local 47 sought inter alia, to enjoin all the defendants from: "discharging the employees currently performing janitorial word" at the Rockwell and the Illuminating Buildings; "changing any of the wages, hours, or the terms and conditions of em- ployment of said employees", and directing the reinstatement of the employees dis- charged. The district court denied injunctive re- lief on the ground that Local 47 failed to establish irreparable harm as a result of CCM's actions. On appeal, Local 47 argues "that all [it] seeks is the reinstatement of employees it has represented for many years to the locations where CCM has taken that work away". Brief for Local 47 In Answer to Brief of CPS at 16. In Aluminum Workers International Union, Local 215 v. Consolidated Aluminum Corp., 696 F. 2d 437, 441-444 (6th Cir. 1982), this court considered the narrow exception to the anti-injunction policy of our national labor laws announced in Boys Markets v. Retail Clerks Union, 398 U.S. 235, 254 (1970).° °F 5 Boys Markets, the Court carved out an exception to the narrow strictures of section 4 of the Norris-LaGuardia Anti-Injunction Act, 29 U.S.C. §104 (1982), by holding that when the underlying dispute is one over which the parties have agreed to arbitrate and ordinary equitable norms for relief have been met, a court may enjoin a strike in violation of a no-strike clause. It noted that the courts have extended this exception "to embrace employer behavior which has the effect of evading a duty to arbitrate or which would otherwise under- mine the integrity of the arbitral process". Aluminum Workers, 696 F. 2d at 441. To obtain an injunction under Aluminum Workers, the Union must establish that the "underlying grievance is one which the par- ties are contractually bound to arbitrate” and must "satisfy the court that injunctive relief is warranted under ‘ordinary principles of equity'". Id. at 442, quoting Boys Markets v. Retail Clerks Union, 398 U.S. at 254. In the instant case, the Union did not establish that the underlying grievance is one which CCM was bound to arbitrate. The district court could not have enjoined CCM, the non-signatory, without first de- termining that CCM was bound by the arbitra- tion agreement. We therefore hold that absent a judicial determination that two corporations are alter egos or a singular employer, a court may not enjoin a non- Signatory to an arbitration agreement from hiring non-union employees. Furthermore, on this record it appears that the Union employees at the Rockwell and Illuminating Buildings were never hired nor discharged by CPS, CCM or the other defendants. Thus, the district court did not err in denying Loc. 1 47's motion for injunctive relief directing their reinstatement. 74 Local 47 also contends that the district court erred in granting First Union's motion to dismiss. The court dismissed Hoetger & Co., 672 F. 2d 580, 583 (6th Cir. 1982); "We recognize that courts Sued upon." Local 47 argues that the court had jurisdiction Over First Union, even On Smith y, Evening News Association, 371 U.S. 195 (1962), which held that a ment, The holding in Evening News has been extended by this court to include Suits collective bargaining agreements, Hazen Vv. Western Union Telegraph Co., 518 F. 24 766 (6th Cir. 1975) (Suit brought by widow Of union member), and to Suits brought by non~signatory employees who Claimed that bargaining agreements, Hill y. Iron Workers Local 25, 529 FP. 2d 40 (6th Cir. 1975) (Suit brought by non-union member alleging he was Protected by Provisions of collective bargaining agreement). In the case at bar, neither the rights of First Union are in any way protected nor are its duties set forth in the Provisions of the Local 47-cps The Union relies heavily on Wilkes-Barre Publishing Co. v. Newspaper Guild of Wilkes-Barre, Local 120, 647 F. 2d 372 (3d Cir. 1981), cert. denied, 454 U.S. 1143 (1982) and Painting and Decorating Contractors Ass'n of Sacramento v. Counties, ing., fue &. 2a i067 (Sth Cir. 1983), cert. denied, 104 S. Ct. 1709, (1984), in support of its broad contention that section 301 subject matter jurisdiction exists over all suits for violation of collective bargaining agreements.’ The majority of courts, however. continue to apply a much narrower Even in Wilkes-Barre Publishing and Painting and Decorating Contractors, there were close re- lationships between the parties and the sig- natories of the collective bargaining agree- ments. In Wilkes-Barre, the non-signatory party was a co-venturer in an enterprise which allegedly breached the coliective bargaining agreement, and in Painting and Decorating Contractors, the non-signatory party was a non-profit corporation which consisted of presentatives from the signatory em- ployer associations and union. In the instant case, the connection between First Union and the collective bargaining agreement is tenuous: First Union has an agreement with an independent contractor, CCM, and CCM is allegedly an alter ego of CPS, a signatory to the agreement. interpretation of the scope of section 301 jurisdiction. See Carpenters Local Union No. 1846 v. Pratt-Farnsworth, Inc., 690 F. 2d 489, 502 (5th Cir. 1982), cert. denied, 104 S. Ct. 335 (1984); Loss v. Blankenship, 673 F. 2d 942, 946 (7th Cir. 1982); Bowers v. Ulpiano Casal, Inc., 393 F. 2d 421, .423 (lst Cir. 1968); Fox_v. Mitchell Transport, Inc., 506 F. Supp. 1346, 1349 (D.Md.), aff'd mem., 671 F. 2d 498 (4th Cir. 1981). We therefore hold that a district court does not have subject matter jurisdiction over a non-Signatory to a collective bar- gaining agreement, where no rights or duties of the non-signatory party are stated in_the terms and conditions of the contract. First Union originally moved to dismiss solely on the grounds that the court lacked subject matter jurisdiction over it under section 301. Local 47 then amended its com- plaint to include a pendent state law claim for tortious interference with contractual rights. Dismissal of this pendent claim was required once the federal claim was dis- missed. See United Mine Workers of America v. Gibbs, 383 U.S. 715, 726 (1966); Kurz v. Michigan, 548 F. 2d 172, 175 (6th Cir.), cert. denied, 434 U.S. 972 (1977); Gibson v. First Federal Savings and Loan Ass'n of Detroit, 504 F. 2d 826, 830-31 (6th Socal 47 also argues that the court erred in granting First Union's motion to dismiss solely on the basis of evidence pre- sented at the hearing on Local 47's motion for a temporary restraining order. Because we conclude that the court lacked subject matter jurisdiction over the claims against First Union, we do not reach this issue. SS Gir. 1974).° Thus, the district court erred in dismissing Local 47's state law claim on the merits. It should have dismissed the claim without prejudice for want of jurisdiction. V. Local 47 also objects to the dismissal of TSM and Antares from the suit. It contends that the court should have ordered these corporations to arbitrate in order to "fully develop" the relationships among TSM, Antares, CCM, and CPS. As we held earlier in this opinion, a non-signatory to a collective bar- gaining agreement cannot be bound to its arbitration clause unless the court deter- iiines that the corporations may be pierced ar that the corporations constitute a single employer. Moreover, in the instant case, Local 47 has never alleged that TSM or Antares violated the terms of the collective bargaining agreement. Furthermore, these corporations, as we have suggested, never hired ner discharged any of the employees whom Local 47 now seeks to reinstate. There- fore, the district court committed no error in dismissing the claims against TSM and Antares. "This circuit has moved away from the position that the court has discretion to re- tain jurisdiction over a pendent state claim where the federal claim has been dismissed be- fore trial. Compare Kurz v. Michigan, 548 F. 2d at 175, and Gibson v. First Federal Savings and Loan Ass'n. of Detroit, 504 F. 2d at 830-31, with Gray v. International Ass'n of Heat & Frost Insulators, Local No. 5l, 447 F. 2d 1118, 1120 (6th Cir. 1971). VI. Finally, CCM asserts that the court erred in denying its motion for partial summary judgment. According to CCM, the record demonstrates that there are no material facts in dispute with regard to the single employer-alter ego issue and that judgment should have been entered for CCM as a matter of law. CCM's argument is based on its contention that the district court should have made a determination on the single employer-alter ego issue. Had the court done so, according to CCM, it would have concluded that the facts as presented at the hearing and alleged by the parties could not support a finding that CPS and CCM were alter egos or constituted a single employer, 10 Local 47 argued in response to CCM's motion for summary judgment that discovery has not been completed and that a determination by the court on the alter ego-single employer issue would be premature until further evi- dence has been presented. We agree. Local 47 has not yet had the opportunity to pre- sent the evidentiary support for its position that CPS and CCM constituted a single employer 105, appeal, CCM has apparently dropped its argument that the court lacks subject matter jurisdiction under section 301 be- cause CCM was a non-signatory to the collective bargaining agreement. or are alter egos. 7 Under the circumstances, and because we remand the case to the dis- trict court for a full determination of this question, we conclude that the district court did not err in denying CCM's motion for partial summary judgment on this issue. Vil. To recapitulate, we hold that the district court erred in ordering CCM to arbitrate under a collective bargaining agreement to which it was a non-Signatory, and we remand for a determination of whether CCM and CPS constitute a single employer or alter egos, or whether the relationship between them is such that piercing the corporate veil separating them would be appropriate. We also conclude that the district court had no jurisdiction to entertain the merits of the state law claim against First Union. In all other respects, the judgment of the district court is affirmed. In the appeal of CCM, No. 83-3761, each side will bear its own costs. In the appeal of CPS, No. 83-3762, costs are taxed against the appellants. In the cross-appeal of Local 47, No. 83-3786, costs are taxed against the cross-appellant. *toeal 47's motion for summary judgment and its response to CCM's motion focused almost exclusively on the argument that the alter ego-single employer issue should be determined by the arbitrator rather than by the court. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION SERVICE, HOSPITAL, NURSING) CASE NO. C83-588 HOME AND PUBLIC EMPLOYEES UNION, LOCAL NO. 47, AFFILIATED WITH THE SER- VICE [EMPLOYEES] INTER- NATIONAL UNION, AFL-CIO, CLC Plaintiff JUDGE SAM H. BELLI. — COMMERCIAL PROPERTY SER- VICES, INC., et al. MEMORANDUM AND ORDER Defendant. Service, Hospital, Nursing Home and Pub- lic Employees Union, Local No. 47, affilia- ted with the Service Employees International Union, AFL-CIO, CLC (hereinafter Local 47) filed this action pursuant to §301 of the Labor Management Relations Act (hereinafter LMRA), 29 U.S.C. §185, seeking a temporary restraining order, preliminary and permanent injunctive relief. Five companies are named as defendants: Commercial Property Ser- vices, Incorporated (hereinafter CPS); Cleveland Cleaning and Maintenance Company (hereinafter CCM); Total Systems Management, Incorporated (hereinafter TSM); Antares, Incorporated (hereinafter Antares); and First Union Management, iene. After a hearing and order dated February 25, 1983, this court denied plaintiff's motion for temporary restraining order having found that the criteria for such relief had not been established. In addition, the order granted a motion to dismiss First Union Management, Incorporated. Presently pending before the court is plaintiff Local 47's motion for summary judgment, defendant CCM's motion for par- tial summary judgment, defendant's Antares and TSM motions to dismiss the complaint as it relates to them, plaintiff Local 47's motion to dissolve protective order and First Union's motion for modification of blanket protective order. Motions in opposition have been filed to all of the above. I. Local 47's Motion for Summary Judgment and CCM's Motion for Partial Summary Judgment A. Local 47's Motion for Summary Judgment Local 47's major premise is that all the defendants are bound to the terms of Article x1t of the collective bargaining agreement which covers job protection of its employees. Two incidents of alleged violation of Article XI are cited: the contracts entered between CCM and First Union Management, Incorporated, for the provision of janitorial services at the Rockwell Building and the Illuminating this article provides that when one employer of Local 47's members loses a contract to another employer of Local 47's members, the members' jobs are to be preserved under the new contract; in other words, the previous employees would be retained by the new employer at the building covered by the contract. Building in downtown Cleveland. Both of these contracts have been filled with non-union workers which has served to dis- place Local 47's members employed at these locations under the previous contracts. Local 47 requested that CPS and CCM arbi- trate two grievances: one relating to known sites where CCM had assumed contracts which displaced Local 47 members and the other relating specifically to the Rockwell Properties and the Illuminating Building. Both defendants have refused to submit these matters to arbitration. Plaintiffs assert the position that on these and the following undisputed facts they are entitled to summary judgment. The relief sought is this court's order com- pelling all defendants to arbitrate the two grievances concerning the displacement of Local 47 members by non-union janitorial workers hired by CCM. Injunctive relief including reinstatement of Local 47 and continuation of the terms of the collective bargaining agreement duri~™= the pendency of arbitration is also sought. Pursuant to Federal Rule of Civil Procedure 56(c), the party wowing for summary judgment has the burden of showing that no genuine issue of material fact exists and that as a matter of law, they are entitled to judgment. In reviewing a motion for summary judgment, a court must consider the pleadings, related documents and evidence, and all reasonable inferences in a manner most favorable to the non-moving party. Adickes v. Kress & Co., 398 U.S. 144 (1970); Smith v. Hudson, 600 F. 2d 60 (6th Cir. 1979), cert. dismissed, 444 U.S. 986 (1979); Board of Cincinnati v. Department of H.E.W., 532 F. 2d 1070 (6th Cir. 1976). After a lengthy hearing related to a motion for temporary restraining order and review of a myriad of exhibits, this court set out the facts before it in its order dated February 25, 1983. The summary of facts at pages 1-6 of that order has not been expanded or altered for the purpose of summary judgment review and shall be incorporated by reference in this order. Because Local 47 first addresses its allegations toward CPS and CCM and also because there is a motion to dismiss Antares, Incorporated and Total Systems Management before this court, discussion of plaintiff's claim against the four defendants will be divided accordingly. The master collective bargaining agreement at issue in this matter con- tains a clause entitle? Grievance and Arbitration. See Plaintiff's Exhibit A, Article XIX. A grievance procedure is established which uses arbitration as the final resolution disputes and makes the arbitrator's decision "final and binding upon the Employer and the Union". Id. at Article XIX, section 4. CPS is a signatory on the master collective bargaining agreement with Local 47. CCM, on the other hand, has employed non-union janitorial workers since its inception and has never been a party to or signatory on any collective bargaining agreement with Local 47. The first question which must be addressed is whether this court may assume §301 jurisdiction as it relates to CCM inasmuch as there is an absence of con- tractual relationship between it and Local 47. Section 301(a) provides that federal ‘courts have jurisdiction to examine alleged violations of collective bargaining agreements: (a) Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought it any district court of the United States having juris- diction of the parties, without respect to the amount in con- troversy or without regard to the citizenship of the parties. 29 U.S.C. §185(a). Three requirements must be met to assert a §301 claim: (1) an assertion of a violation of (2) a contract (3) between an employee and a labor organi- zation. Carpenters Local Union No. 1846 v. Pratt-Farnsworth, 690 F. 2d 489, 500 (5th Cir. 1982), citing, Alvares v. Erickson, 514 F. 2d 156, 161 (5th Cir.) cert. denied, 423 U.S. 874 (1975). These requirements are definitely met as to CPS. As CCM is a non- Signatory to the contract, however, juris- diction may only be assumed if Local 47 can establish an alternate ground for holding CCM to agreement. ° Carpenters Local Union Jurisdiction of a §301 claim against one who was not a party to a collective bargaining agreement was recently approved by the Sixth Circuit in Metropolitan Detroit Bricklayers District Council, Int'l Union v. J. E. Hoetger & Co., 672 F. 2d 580 (6th Cir. 1982), in the context of a joint employer issue. No. 1846 v. Pratt-Farnsworth, supra at 503. Local 47 contends that CCM is in fact bound to the master contract on either of two theories: First, by virtue of Article XXI 2 of the contract 3rhis agreement shall be binding upon and for the benefit of the signatories hereto and their respective successors and assigns. This agreement hereby covers as an Employer subject to the full terms of this agreement any individual proprietor- ship, partnership, corporation, firm, or any other entity which is engaged in janitorial work and is in any way a subsidiary or related entity ‘to any Em- ployer covered by this agreement. Speci- fically and without limitation, this agreement hereby includes any entity en- gaged in janitorial work which is operated in whole or part by any officer, director or any person employed by any employer covered by this agreement, and further includes any entity engaged in janitorial work in which any investor in any employer covered by this agreement has any interest of any kind. Any employer covered by this agree- ment, including without being limited to employers covered solely by operation of this article, may not subcontract to any other person or entity any of the work which is or may be performed by em- ployees covered by this agreement, ex- cept for the cleaning of venetian blinds, cleaning required by an emergency occasioned by fire or flood, or a one time only special job. and second, because CCM is allegedly an alter ego of CPS. Either of these theories properly allege §301 jurisdiction as to CCM as long as the underlying grievances are arbitrable. See Buffalo Forge Co. v. United Steelworkers of America, 428 U.S. 397 (1976) and the Steelworkers Trilogy: United Steeiworkers v. American Mfg. Co., 363 U.S. 564 (1960); United Steelworkers v.-Warrior & Gulf Navigation Co., 363 U.S. 574 (1960); United Steelworkers v. Enter- prise Wheel & Car Corp., 363 U.S. 593 (1960). In this case the underlying grievances in- volve the Sieniacinune of workers covered by Local 47's master agreement. This is a matter that would violate a specific pro- vision of the contract by a party and would be subject to arbitration under that agree- ment. See Plaintiff's Exhibit A, Article XI, Job Protection. Accordingly, the court finds that it may assume §301 jurisdiction over Local 47's claim as it relates to both CPS and CCM. The Sixth Circuit Court of Appeals has defined the inquiry to be undertaken by a district court when a union files a Suit to compel arbitration under these cir- cumstances. Local No. 6, Bricklayers, Masons and Plasterers International Union of America v. Boyd G. Heminger, Inc., 483 F. 2d 129 (6th Cir. 1973). The court held that the union's burden "was not to present a prima facie case on the creation of a sham or alter ego corporation by the employer. The burden was to show that, assuming there was a sham or alter ego corporation..., there would then be a vio- lation of the collective bargaining agree- ment". Id. at 131. In compliance with federal policy favoring arbitration when it is made a part of a collective bargaining agreement, the court found that because the underlying dispute was arbitrable, the alter ego issue shouid also be resolved by arbi- tration. The case was remanded to the district court to order arbitration be- tween the signatory company and the union. The union had not sought a remand for direction of arbitration as it relates to the alleged alter ego company. With the guidance of the Sixth Circuit and the national policy favoring arbitra- tion, South Prairie Construction Co. v. Local 627, IUVOE, AFL-CIO, 425 U.S. 800 (1976); Carey v. Westinghouse Electric Corp., 375 U.S. 261 (1974), it seems apparent to this court that not only the underlying grievances but also the issues as to whether CCM is bound to the master agreement by vir- tue of the contract or by virtue of being an alter ego should be ordered to arbitra- tion. CPS and CCM argue in their briefs in opposition to Local 47's mution for summary judgment that the matters involved in this case are "representational" rather than "contractual". The significance of this argument is that representational issues are clearly within the exclusive domain of the National Labor Relations Board (here- inafter NLRB) and not niituek to arbitra- tion. It would appear that if CC” is found to be liable under the contract for the pur- pose of the grievances before the arbitrator, however, no new representation would have to be ascertained since all of the affected em- ployees had been Local 47 members before displacement. In addition, if the arbi- trator's decision does not completely dis- pose of this dispute, and if actual repre- sentational issues need to be resolved, the NLRB could then take jurisdiction of those issues. Accordingly, it is the order of this court that Local 47's summary judgment motion as to CPS and CCM is granted. CPS and CCM are ordered to submit to arbitration the two grievances filed by Local 47 which are the Subject of this controversy. The additional relief sought by Local 47 in the form of injunctive relief for reinstatement of Local 47 employees is, however, denied. The court fully explored the evidence in relation to the requirements for granting injunctive relief in its February 25, 1983 order denying plaintiff's motion for temporary restraining order. No new evidence has been presented, and the court finds no reason to justify such relief. B. CCM's Motion for pirtial Summary Judgment. The major premise advanced by CCM in support of its motion is that it is entitled to judgment as a matter of law because it is a nonsignatory on any coilective bargaining agreement with Local 47 and not an alter ego of CPS. CCM argues that if this court does not so find, then its motion to stay should be granted pending resolution of the alleged unit ussue by the NLRB. In view of the findings of the court in relation to Local 47's motion for summary judgment, CCM's position is untenable. It has been decided that §301 jurisdiction is possible over a nonsignatory party and that the alter ego issue should be referred to arbitration with the underlying grievances. CCM argues that the Sixth Circuit has addressed the issues before this court in Service, Hospital, Nursing Home and Public Employees Union, Local 47 v. Cleveland Tower Hotel, Inc., 606 F. 2d 684 (6th Cir. 1979) and decided that Local 47 could not impose its bargaining agreement upon non- Signatories in this situation. That suit was a §301 claim seeking enforcement of four collective bargaining agreements as they allegedly related to a successor em- ployer. Arbitration was not sought or con- Sidered. The factual inquiry as to whether the new employer was successor to the old, and thereby a signatory on the bargaining agreement, was squarely before the court and decided against Local 47. The complaint before this court seeks an order to arbi- trate and injunctive relief and has been found subject to arbitration pursuant to Sixth Circuit direction in more similar circumstances. See Local 6, Bricklayers, Masons and Plasterers Int'l Union of America v. Boyd G. Heminger, Inc., Supra. This court is not addressing the merits of whether the bargaining contract may be ex- tended to reach CCM but only whether it should be submitted to arbitration. Accordingly, the Cleveland Tower Hotel, Inc. case is inapposite. For these reasons, it is ordered that CCM's motion for partial summary judgment is denied. II. Antares and TSM Motions to Dismiss TSM, a wholly owned subsidiary of CPS, was formed in 1978 to serve as a managing consulting company for small tenant buildings which generally cannot afford the service of a full cleaning service. TSM would secure written bids from various contractors to service the small tenant accounts on a subcontractors basis. Janitorial workers were never employed by TSM but rather provided by the sub-contractor. CPS, among others, held sub-contracts with TSM. A management account was sold to CCM in February, 1982 which expired in June, 1982. Otherwise, TSM has not con- ducted any business since June, 1981. Antares, a Pennsylvania Corporation, was formed by Mr. Patrick J. Cassese in November, 1982 for the purpose of pur- chasing CPS stock owned by its twelve in- vestors (hereinafter B Shareholders). (Mr. Cassese held the thirteenth interest in CPS.) The agreement between Antares and the B Shareholders was for the purchase and retirement of their shares by Antares and and issuance of notes to the B Shareholders secured by the shares pledged to three of the B Shareholders under a pledge agreement. In this manner, Mr. Cassese became owner of one hundred percent of Antares which in turn owns one hundred percent of CPS. TSM and Antares assert that they should be dismissed becwnee wither has or has had any janitorial employees nor has Local 47 demonstrated any dispute as it relates to them. Local 47 contends first that §301 jurisdiction should extend to these non- Signatories as well and that as entities covered by Article XXI, supra at n. 3, they should be required to appear before the arbitrator for a full resolution of the alter ego issue. Although Local 47 argues that the evi- dence does not substantiate that these en- tities have no employees, it appears clear to the court that there is no evidence pro- duced by Local 47 that either entity employs or could employ janitorial workers. There is certainly no allegation that either entity has contracted to provide janitorial services which has resulted in the displace- ment of its members. This court has deter- mined that §301 jurisdiction is possible as to nonsignatories to a bargaining agreement but only upon the showing of some alternate ground. As plaintiff's claim relates to Antares and TSM, however, even iff they could be found to be alter egos, they have not been alleged to have caused injury to Local 47. Accordingly, Antares and TSM are dis- missed as parties and are not included in the court's arbitration order. III. First Union Management, Incorporated, Motion for Modification of Blanket Protective Order and Local 47's Motion to Dissolve Protective Order. The numerous exhibits submitted during the course of the temporary restraining order hearing have been subject to a blanket pro- tective order entered without objection by any party. Review and copying by each party was allowed for the purpose of preparing post-hearing briefs. While Local 47 now requests that the protective order be dissolved, First Union and CCM urge that it be con- tinued due to the prejudicial effect dis- closure would have upon them in the market- place and in a labor relations sense. The court finds that these concerns are well taken, especially as they relate to First Union who has been dismissed from this suit. As this case is terminated before this court with the issuance of this order, the follow- ing order shall apply to the exhibits held by the court: (1) The exhibits shall be used for no purpose other than preparation for arbitra- tion or of an appeal ce rulings of this court. (2) All protected materials in possession of any party shall be returned under seal to its owner within ten days of this order. (3) For the purpose of arbitration or appeal preparation, counsel for all con- cerned parties shall meet within the thirty- day period to agree upon the exhibits they each require for use on appeal. A statement Shall be drawn and submitted to the court indicating each parties requests by exhibit number. Copies may be made the courthouse at the attorneys' expense or the court will approve another method of duplication pro- vided all parties have agreed. (4) After thirty days have passed from the date of this order, the court will dis- tribute the exhibits to their owners through the respective attorneys who make a request within ten days. 1T IS SO ORDERED. /s/ Sam H. Bell SAM H. BELL U. S. District Judge EXHIBIT "A" AGREEMENT between SERVICE, HOSPITAL, NURSING HOME AND PUBLIC EMPLOYEES UNION, LOCAL 47 AFL-CIO and CLEANING CONTRACTORS TERM OF AGREEMENT: May 1, 1981 to April 30, 1984 Article XXV XXVI XXVIII XXVIII XXIX XXX Exhibit "A" CONTENTS Description Recognition, Union Shop, Checkoff and Non- Interference Management Seniority Overtime Holidays Designated Pay Day No Wage Penalty Wage Schedule Pension Plan Attrition Job Protection Health and Welfare Fund Miscellaneous Employer and Union Responsibilities No Collections Vacations Authorized Leaves of Ab- sence Without Pay Miscellaneous Benefits Discharge and Discipline Grievance and Arbitration Picket Lines Successors and Assigns Other Employers Minimum Rates Employees' Records Compliance With Regulatory Laws General Provision Union Stewards Supervision Remedies Complete Agreement Duration Schedule A Schedule of Benefits A-2 Page AGREEMENT THIS AGREEMENT made and entered into between SERVICE, HOSPITAL, NURSING HOME AND PUBLIC EMPLOYEES UNION, LOCAL NO. 47, AFL-CIO, hereinafter referred to as the "UNION", affiliated with Service Employees International Union, AFL-CIO, and COMMERCIAL PROPERTY SERVICES, INC., hereinafter referred to as the "EMPLOYER", WITNESS ET Hd: WHEREAS, it is the desire of the said Union and the Employer to enter into an Agreement to establish a peachful settle- ment and adjustment of all grievances which wili tend to stabilize and strengthen the business of the Employer and to establish wage rates and working conditions, including work load, which will prevail between the parties hereto during the existence of this Agreement, NOW, THEREFORE, it is hereby mutually agreed: ARTICLE I Recognition, Union Shop, Checkoff and Non-Interference Section 1. Recognition. The Employer recognizes the Union as the exclusive collective bargaining agent for all its employees engaged in janitorial work, ex- cluding office employees and supervisors as defined in the Labor-Management Relations Act of 1947, as amended; i.e., Supervisors who only perform bargaining unit work as per- mitted by Article XXVII and also excluding Only any such account where only one (1) employee is engaged, if such an account is not owned or operated by an entity which operates in more than one location serviced by the Employer. Accounts being serviced A= 3 as of June 15, 1981 under the fifteen (15) hour or less exclusion in the 1978-1981 Agreement between the parties shall, so long as the same Employer continues to service the account, remain excluded if the Employer provides to the Union by June 30, 198l a written list of the name, locations at which the work is performed, and initial ser- vicing date of all such accounts. ARTICLE IX Pension Plan Section 1. Signatory to Plan. The Employer, by becoming signatory to this Agreement, agrees to be bound by the trust document establishing the Building Service Local 47 - - Cleaning Contractors Pension Plan, and the Employer further here- by agrees to abide by all rules and regu- lations promulgated by the Trustees of said Plan, not inconsistent with this Agreement. Section 2. Contributions. The Employer shall contribute to the Building Service Local 47 - - Cleaning Con- tractors Pension Plan the following amounts: Effective Date Amount May 1, 1981 Sixteen cents (.16) May 1, 1982 Eighteen and one-half cents (.185) May 1, 1983 Twenty-one cents (.21) for each hour compensated by the Employer for the term of this Agreement for each em- ployee in the bargaining unit from the date of hire, provided that the Employer shall not have to contribute for employees hired to replace employees on vacation for whom contributions are being made. Such con- tributions shall be due on a monthly basis. Each monthly period shall be a calendar month and shall include all hours compen- sated in all payroll periods which were paid during that calendar month. The amount A-4 due for any given month shall be paid in full to the Pension Plan not later than the twentieth (20th) day of the second month after the month due, i1.e., con- tributions due for hours compensated in January are to be paid not later than March 20. The Employer shall also con- tribute to the Pension Plan any amounts it owes as withdrawal liability as pro- vided by law. Contributions shall be paid by the Employer to the agent designated by the Trustees of the Pension Plan, and Shall be accompanied by a list of the full names of all employees for whose compensated hours contributions are being made, the social security numbers of each such em- ployee, and the number of hours compensated for each employee on which contributions are then being made. ARTICLE XI Job Protection Section 1. When an Employer takes over an account at which employees repre- sented by the Union were previously employed, regardless of who was the Employer, the Employer shall not reduce the rate of pay, the other terms of compensation, or the number of employees and their hours of work, Or change the starting and quitting times of any employee on that account without the express written consent of the Union, unless one of the exceptions set forth in Section 2 of this Article may be applied. Section 2. The Employer shall not re- duce the rate of pay, other terms of com- pensation, the number of employees or the total number of hours assigned, or change the starting and quitting times of any em- ployee at any individual account or job Site from what they were on the effective date of this Agreement, without the ex- A-5 press written consent of the Union. How- ever, the application of the provisions of Article X, Attrition, shall be an exception to this Section, and the reduction of a Substantial amount of work on an account shall permit a layoff of employees in accord with the terms of this Agreement appropriate to the reduction of work for the Employer on that account. This exception for reduc- tion of work on an account shall not be used as a basis for increasing the workload of any employee. Section 3. Whenever an Employer loses an account or job site such Employer shall give written notice of such loss of the account or job site at least twenty (20) days prior to the effective date of the loss, if such notice is possible. The notice shall specify the person or business entity which will provide the cleaning services to that account, if known, upon the termination or the service by the Employer giving the notice, and shall list employees who were working at that account, including their addresses and telephone numbers, and the job classification, current rate of pay, and schedule of hours worked with starting and quitting times for each day for each employee. Failure to give such notice re- quired above shall subject the Employer to liquidated damages of One Hundred Dollars ($100.00). Section 4. If an individual account or job site has been taken over by an Employer, Or an employee files a written complaint with the Union claiming a violation of this Article at an individual account or job site, the Union shall have the right to conduct an investigation, including the inspection and auditing of the books or records of the present or former Employer necessary to verify the hours of work of the employees relating to such an individual account or job site, in order to determine whether any provisions of this Article have been violated. All fringes shall be the continued obligation of the new Employer. A-6 Section 5. When an Employer takes over an account upon which employees were pre- viously represented by the Union, such Em- ployer shall immediately notify the Union of such take-over and furnish the Union a written list of the employees who are to be retained at the account. Failure to give such notice required above shall subject the Employer to liquidated damages of One Hundred Dollars ($100.00). The Empioyer shall employ the same employees that worked on that account as specified in Section l of this Article, except for those employees who elect to continue working for the Employer which has lost the account. Those employees shall have as their seniority with the new Employer the same total seniority which they had with the previous Employer. Also, the seniority of the employees at the individual account shall be that which they had with the previous Employer at that account. Section 6. No work which is now or may be performed by the members of the bargaining unit covered by this Agreement shall be performed by any person who is not a member of the bargaining unit; except in an emer- gency or for the purpose of instructing in proper methods. Section 7. If an Employer which has Signed this Agreement as its first Agreement with the Union has reduced the number of employees or the hours of work at an account or job site at which employees were repre- sented by the Union prior to that Employer taking over the account or job site, the number of employees and/or the total number of hours worked at such accounts or job Sites shall immediately be restored to the levels that existed when the Union last previously represented employees working at that account and/or job site. Arf _. Section 8. an Employer takes over an account with ich Local 47 has an Agreement other ..i.an this Agreement, the Employer will sign an Assumption Agree- ment prior to taking over the job. All conditions such as rates of pay, hours of work, seniority, vacations, holidays, insurance coverages, pension coverages and any items not specifically enumerated herein shall continue as they previously existed. ARTICLE XII Health and Welfare Fund Section 1. Signatory to Plan. The Employer, by becoming signatory to this Agreement, agrees to be bound by the trust document establishing the Local No. 47 Welfare Fund No. 1 and the Employer further hereby agrees to abide by all rules and regulations promulgated by the Trustees of said Fund, not incon- Sistent with this Agreement. Section 2. Contributions. Effective May 1, 1981 the Employer Shall contribute forty cents (.40) per hour to the Local No. 47 Welfare Fund No. 1 for each hour compensated by the Employer for the term of this Agreement for each employee in the bargaining unit from the date of hire, provided that the Employer Shall not have to contribute for employees hired to replace employees on vacation for whom contributions are being made. Such contributions shall be due on a monthly basis. Each monthly period shall be a calendar month and shall include all hours compensated in all payroll periods which were paid during that calendar month. The amount due for any given month shall be paid in full to the Welfare Fund not later than the twentieth (20th) day of the second month after the month due, i.e. contributions due A-8 for hours compensated in Janvary are to be paid not later than March 20. Contribu- tions shall be paid by the Employer to the agent designated by the Trustees of the Welfare Fund, and shall be accompanied by a list of the full names of all employees for whose compensated hours contributions are being made, the social security numbers of each such employee, and the number of hours compensated for each employee on which con- tributions are then being made. Section 9. Benefits. During the term of this Agreement the benefits provided by the Fund shall be the benefits provided on April 30, 1981 plus the improvements in life insurance, acci- dental death and dismemberment insurance, accident and sickness weekly indemnity, and paid prescription benefits reflected in Schedule A. The eligibility requirements for benefits provided by the Fund shall re- main the same as they were on April 30, 1981. Section lo. Reserves of the Fund. Whenever the reserves of the Health and Welfare Fund fall below the amount of three months' expenditures, the Trustees shall immediately meet and determine the amount of additional contribution necessary by the Employers to meet all the obligations of the Fund and to maintain the aforesaid reserve. Immediately upon such a determina- tion each Employer contributing as a party to this Agreement shall be informed of the decision of the Trustees and shall begin making contributions as required by that decision. The term "three months' expenditures" Shall be deemed to equal one-fourth (1/4) of the Fund's expenditures in the twelve- month period ending with the date of the last financial statement. The Trustees Shall work diligently to effect cost Savings where reasonable and proper and to A-9 increase administrative efficiency in the operation of the Health and Welfare Plan. ARTICLE XIX Grievance and Arbitration Section 1. Grievance Procedure. Should differences arise between the Em- ployer and the Union as to the meaning of or application of provisions of this Agreement, such differences shall be settled in the following manner and order: (a) The matter shall be discussed between the employee, his Steward, if there is a Steward on the account, and the immediate supervisor within a reasonable time after the employee has knowledge of the event giving rise to the grievance. (b) If a satisfactory settlement is not reached in Step (a), the matter shall be discussed within a reasonable time between the designated repre- sentatives of the Employer and the Union. The representative of the Employer shall state, in writing, the reasons for disagreement with the position taken by the representa- tive of the Union. Reasons cited shall be made with specificity, shall cite this Agreement where appropriate and shall state all issues of fact and interpretation. The Employer may request a like statement from the Union. (c) If a satisfactory settlement is not reached at Step (b) concerning an Employer or employee gri¢evance, the matter may be taken before the Executive Board of the Union for approval to submit the matter to arbitration. If the matter is not taken before the Executive Board within sixty (60) days of the Union's receipt of the Employer's A-10 written statement in Step (b), the matter shall be considered settled in accordance with the Employer's written statement. Section 2. Powers of the Executive Board. The Executive Board, upon due con- Sideration, may deny approval for the sub- mission of any matter to arbitration. Fur- ther, the Executive Board may approve the Submission of any matter to arbitration of its own motion without consent of the em- ployee or employees involved. Section 3. Arbitration. Once a matter has been approved for arbitration, the Union shall request a panel of seven (7) arbitrators from Federal Mediation and Conciliation Service. If none of the arbi- trators on the panel is acceptable to the Union, the Union shall so notify the Enm- ployer and request Federal Mediation and Conciliation Service to forward a second panel. If the Union finds one or more arbi- trators on the list to be acceptable, it shall send by Certified Mail a priority listing, ranking all acceptable arbitrators in order of preference, said priority listing to be sent to the Employer or his representative designated, in writing, to receive such correspondence. If no response is received frim the Employer or his representative by Certi- fied Mail within fourteen (14) days from the mailing of the Union's priority listing, the Employer shall be deemed to have agreed to the appointment of the first arbitrator on the Union's priority listing. The Employer or his representative may within the fourteen (14) day period notify the Union, in writing, by Certified Mail of its preference for the appointment of an arbitrator or may request that a second panel be obtained from the Federal Media- tion and Conciliation Service. A-11l If both parties forward a list of preferred arbitrators, t*»*y shall discuss the appointment of an arbitrator by mutual designation. If no agreement is reached within fourteen (14) days of the Union's receipt of the Employer's priority listing, the Union shall automatically re- quest a second panel from the Federal Mediation and Conciliation Service, unless the parties mutually agree to the contrary. In any case where a second panel is requested, the parties shall be bound to select an arbitrator by the strike-off method, the Union and the Employer alter- nately striking a name from the panel, the last remaining arbitrator to be deemed the mutual selection of the parties. Section 4. Power of Arbitrator. De- cision of the Arbitrator shall be final and binding upon the Employer and the Union. The arbitration procedure shall not be used to change or modify this Agreement. Section 5. No Strike - - No Lockout. Inasmuch as this Agreement provides for fair and equitable means of disposing of grievances, the employees and the Union, both individually and collectively, agree that, except as provided herein, there Shall be no strike, slow-down, or inter- ference with production during the life of this Agreement and the Employer agrees it will not lock out the employees during the life of this Agreement. Section 6. The Employer, in any actual case or controversy, may institute a griev- ance at Step (b) by serving a written state- ment on the designee of the Union. Such statement shall be sent by Certified Mail and shall state all issues of fact and inter- pretation, citing the contract where appro- priate and shall make a specific demand for relief. In all such cases the status quo, as determined by the position of the Union, shall be maintained until the matter is settled. Section 7. It is agreed by the Union and the Employer that the individual fees and expenses of the arbitrator will be paid equally by both the Union and the Employer. ARTICLE XXI Successors and Assigns Other Employers This Agreement shall be binding upon and for the benefit of the signatories hereto and their respective successors and assigns. This Agreement hereby covers as an Employer subject to the full terms of this Agreement any individual proprietorship, partnership, corporation, firm or any other entity which is engaged in janitorial work and is in any way a subsidiary or related entity to any Employer covered by this Agreement. Specifically and without limi- tation, this Agreement hereby includes any entity engaged in janitorial work which is operated in whole or in part by any officer, director or any person employed by any Employer covered by this Agreement, and further includes any entity engaged in janitorial work in which any investor in any Employer covered by this Agreement has any interest of any kind. Any Employer covered by this Agreement, including without being limited to Employers covered solely by operation of this Article may not subcontract to any other person or entity any of the work which is or may be performed by employees covered by this Agreement, except for the cleaning of venetian blinds, cleaning required by an emergency occasioned by fire or flood, or a one time only special job. A-13 ARTICLE XXVIII Remedies The provisions of this Agreement, as they relate to Union Security and dues collection, bonding requirements, Pension, Health and Welfare and other economic items, may be enforced by a civil action filed in any Court of the United States_or of any State which has competent jurisdiction, and the Employer and the Union agree that such Court shall have jurisdiction to grant specific performance and/or all forms of equitable and/or legal relief. The Em- ployer agrees that it will not assert as a defense to any such action the failure of the Union to file and process a grievance under the procedures of this Agreement. ARTICLE XXX Duration THIS AGREEMENT shall become effective as Of May 1, 1981 and will continue in force and effect until midnight, April 30, 1984, and from year to year thereafter until either party desires to modify or terminate the Agreement, and notifies the other party, in writing, of its desire to terminate or modify at least sixty (60) days prior to May lst of any subsequent year. THIS AGREEMENT shail be subject to Amendment at any time by mutual consent of the parties hereto, and any such Amendment agreed upon shall be reduced to writing and Signed by the parties hereto. THIS AGREEMENT WAS EXECUTED BY DULY AUTHORIZED REPRESENTATIVES OF THE PARTIES ON THE DATES BELOW THE SIGNATURES AFFIXED NERETO. SERVICE, HOSPITAL, NURSING HOME AND PUBLIC EMPLOYEES UNION, LOCAL 47, SERVICE EMPLOYEES INTERNATIONAL UNION, AFL-CIO Eee PCC Se EG Geb oGs sce cece ssccccccee eh Eh SSeS ses ee be cece ce ccc cee EES SEG we ees sescceccecrecc Dt Cee Ech SS bes bes eseesecscccccecs By: i ae he hs 6 66 6 © © © & © 0 6s 0 0 00 0 3 oc ES ST Tee PCM ET CCS Gb ee eee secerccssccce SCHEDULE A SCHEDULE CF BENEFITS 1. Life Insurance (as described in your OE $5,000 Beeweuewe wury 1, 1981....... $6,000 Beeeecewe wey 2b, 1983........ $7,000 Note: This life insurance benefit 00 . 00 00 will be reduced to $2,000.00 ($3,000.00 effective July 1, 1981) and will con- tinue in effect for eligible employee- members receiving benefits under the Building Service Local 47 - - Cleaning Contractors Pension Plan. Effective May 1, 1983 Penioners will be covered by $4,000.00 in life insurance benefits. A-15 Accidental Death and Dismemberment DS on 664K HO OA Km Oe Os ee $5,000.00 Effective July 1, 1981l........ $6,000.00 BEseeceve MOy ky EOB2 i oc ss 0 us $7,000.00 Accident and Sickness Weekly Indemnity Maximum Bctective July 1, L9OL.....0s. $ 45.00 BEteccive May 15: 29B2K sc 6 cw cies $ 55.00 BETOCtive Bay 2, ASBdecavccecs $ 65.00 Accident benefits begin with the first day of non-occupational disability. Sickness benefits begin with the eighth day of non-occupational disability. Each is payable for a maximum of twenty- six weeks during any period of disability. Your Weekly Indemnity will be equal to Sixty-six and two-thirds percent (66-2/3%) of your average straight time earnings for the ninety (90) days be- fore the beginning of the period of disability for which benefits are payable, however, it will not exceed the maximum benefit as shown above. Medical Benefits Your coverage for the following plan of medical insurance benefits will begin automatically when yor become eligible. If you elect to obtain your medical coverage through the Kaiser Community Health Foundation or Group Health Plan of Northeast ©O:io when the option is made available to you, you will be covered by the provisions of either plan. Those of you who do not elect to be covered by the Kaiser Group Health Plan will continue to be covered for the following plan of benefits: A-16 Hospital Room and Board -- full cost of semi-private care. Number of days per disability....70 days Hospital Emergency Accident ee a ae | rar ee Full Cost Surgical Expense Benefit (Scheduled Amounts) ......scecseee $500.00 Paid Prescription Benefit--Full cost less $1.00 deductible charge per pre- scription. Family coverage of the paid prescription benefit for active employees Shall be furnished by the Fund effective May 1, 1983, if in the opinion of an actuary employed by the Fund said bene- fit can be provided for twelve (12) months without increasing the contribu- tion rate of the Employers during said twelve (12) months. Vision Care Benefit--full cost less $5.00 Deductible charge for examina- tion, frames and lenses, if provided by a participating panel doctor. If a non-panel doctor is selected, then a benefit schedule will apply. Major Medical Insurance--Maximum Amount (for each cause) $15,000.00. Deductible Amount--the amount of bene- fits provided under our basic plan described above and under any other group plan. Private Room Limit...Up to the hospital's average charge for semi- private rooms. Co-Insurance Factor...See limits respecting psychiatric treatment. Except for the drug prescription benefit pre- scribed above, dependent benefits are not pro- vided under this plan. A-17 EXHIBIT "B" February 7, 1983 Mr. Patrick J. Cassese President Commercial Property Services, Inc. 3416 Prospect Avenue Cleveland, Ohio 44115 Dear Mr. Cassese: Local 47 has just learned that for some time Commercial Property Services, Inc. (CPS) has transfered janitorial work from employees represented by Local 47 to operations under an alter ego of CPS, Cleveland Cleaning & Maintenance, where the employees have been treated as if the were not represented by Local 47 and not covered by collective bargaining agreements between CPS and Local 47. Jn some instances the transfer has been from ¢. tuations where the work was actually performed by CPS, and in other instances the work was per- formed by other employers who were under contract with Local 47 as the representative of their janitorial employees. Local 47 is currently aware of such transfer of operations at the following locations: Curtis Industries, Inc. Eastlake, Ohio Lakeland Medical Building Euclid, Ohio Young Medical Building Cleveland, Ohio Shaker Medical Building Cleveland, Ohio Diamond Shamrock Concord, Ohio B-1 In addition Local 47 has learned a Similar transfer of work is scheduled to take place on February 13, 1983 for the janitorial services performed at the Illuminating Building, 55 Public Square, Cleveland, Ohio, and two buildings located at Rockwell and East Sixth Street in Cleveland, Ohio. Both of those properties are managed by First Union Management, Inc. In all these instances the conduct vio- lates either Article XI and Article XxXI of collective bargaining agreements between CPS and Local 47 which became effective on May 1, 1978 and May 1, 1981, or violates the provision for work preservation in the Agreement reached between Local 47 and Employers of the Downtown Building Group, in¢luding CPS, on November 15, 1982. This letter constitutes two grievances protesting these transfers of work as violations of said Agreements. The first grievance deals with all of the locations listed separately above. The second grievance deals with the work which Cleveland Cleaning & Maintenance is to take over on February 13, 1983 at the Illuminating Building and the East Sixth and Rockwell buildings. [In both grievances the Union seeks restoration of employees displaced from work, full back pay and restoration of all benefits for those em- ployees, payment of all\contributions due to the Pension and Welfare Funds, and ful- fillment of all other obligations which CPS had or has as an employer under the collective bargaining agreements. Since the actions giving rise to the second grievance has not yet taken place but will take place shortly, it is necessary that CPS immediately enter into a written agreement with Local 47 that work performed at the East Sixth and Rockwell Building will B-2 be performed in accord with all terms and conditions of the agreement between CPS and the Union effective May 1, 1983, in- cluding, without limitation, the retention cf employees currently providing janitorial services at that location, and that the work to be performed at the Illuminating Building will be performed in accord with the Agreement reached with CPS and other Downtown Building Employers on November 15, 1982, including, without iimitation, reten- tion of the employees who are currently providing janitorial services at that location, until this grievance can be arbi- trated. If CPS does not enter into such a written agreement by 10:00 A.M. on Wednesday, February 9, 1983 then be hereby advised that at that hour Local 47 will file an action in the United States District Court for the Nor [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_0573%3A1. Public record. Not legal advice.